Morning Agenda: Post-Scaramucci, White House Turns to Taxes

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Steven Mnuchin, the Treasury secretary, at a press briefing in June. He spoke about tax reform at an event Monday that was hosted by Americans for Prosperity, a political network funded by the Koch brothers.CreditCreditDoug Mills/The New York Times

John F. Kelly, the new chief of staff, asserted military discipline, according to reports, and the tough-talking Mr. Scaramucci was escorted out.

But in a bid to stick to the agenda of “American Dream Week” — after the apparent demise of the effort to repeal the Affordable Care Act and after the 10-day drama of the Scaramucci era — the Trump administration tried to show some unity with the Republican Party’s biggest financial backers. Senior officials promised to successfully rewrite the tax code.

“This is a pass/fail exercise, and we will pass tax reform,” said Steven T. Mnuchin, the Treasury secretary.

The administration is under pressure to deliver. It wants to have a bill on President Trump’s desk by Thanksgiving.

So what happens between now and then?

Administration officials said that Mr. Trump would travel the country holding campaign-style rallies to promote a tax overhaul.

House and Senate tax-writing committees will begin marking up legislation shortly after Labor Day, according to Mark Short, the Trump administration’s legislative affairs director. Then, if the bills are passed in October and November, the tax legislation can get to Mr. Trump’s desk before December.

But there are still divisions on how the tax code would be revised:

The White House wants to cut the top corporate tax rate to 15 percent, from 35 percent.

House Republicans favor a cut to 20 percent, which several tax experts said was an ambitious goal. Even Orrin G. Hatch, the chairman of the Senate Finance Committee, thinks that getting to 25 percent would be a challenge.

And members of both parties are already objecting to the administration’s proposal to eliminate the deduction that Americans can take on their state and local taxes.

China Deals Tracker

• Speaking of Mr. Scaramucci, the HNA Group says that its deal to buy his stake in his SkyBridge Capital fund of funds is still on. (No word yet on whether he will return to the firm.)

• India has decided to block Shanghai Fosun Pharmaceutical Group’s proposed takeover of an Indian drugmaker, Reuters reported, citing people familiar with the matter. The $1.3 billion deal to take an 86 percent stake in Gland Pharma would have been the biggest ever Chinese acquisition in the country.

• Formally called the China Integrated Circuit Industry Investment Fund — and known locally as “the Big Fund” — a government-backed fund has been providing financing for deals seen as crucial to helping Chinese companies produce more powerful semiconductors. To its critics, it is a slush fund that will flood the sector with overcapacity.

• China may be clamping down on its homegrown deal-makers. But DealBook’s Andrew Ross Sorkin notes that one American company is making a big move in that country: Starbucks.

Last week, the coffee giant bought out its local partner. It’s part of an eye-opening expansion campaign there, where it’s opening 500 stores a year. Starbucks is even planning a 30,000-square-foot emporium that the company’s chairman, Howard Schultz, thinks could have more significance for Chinese consumers than Shanghai Disney.

“When people ask me how much can you really grow in China, I don’t really know what the answer is, but I do believe it’s going to be larger than the U.S.,” Mr. Schultz told Mr. Sorkin.

Discovery and Scripps: Betting on Cable

They’ve faced ratings declines, advertising weakness and cord cutting. But the companies are hoping that together they can take advantage of their control of about a fifth of the ad-supported pay television audience in the United States.

“People are consuming more content than they ever had on more platforms,” said David M. Zaslav, Discovery’s chief executive. “The question is, what content is going to travel?”

Mr. Zaslav thinks Discovery can help expand Scripps’s content to more than 220 countries and territories, and create new services for mobile and streaming. The deal also brings an expected $350 million in cost savings.

Wall Street, however, was not convinced — Discovery’s stock price plunged on Monday.

Getting distributors to pay for more content will be a hard sell, Breakingviews’ Jennifer Saba argues, since some carriers are instead looking to slim down their offerings. “The Scripps family wisely chose to take the money and run,” she writes.

Snapdeal Calls Off Sale to Flipkart

And it’s a setback for SoftBank, which has been on a run of deal-making recently.

Snapdeal said it was calling off talks to combine with Flipkart, ending efforts by SoftBank to engineer the merger of India’s two biggest homegrown e-commerce companies, The Wall Street Journal and Reuters reported.

SoftBank is the biggest investor in Snapdeal, but said it respected Snapdeal’s decision.

Both Snapdeal and Flipkart have been losing ground to Amazon, which arrived in India in 2014.

Related SoftBank Reading

• Charter shot down the possibility of buying Sprint, but its shares still soared after reports that SoftBank was weighing making a takeover bid. But CNBC’s David Faber reported that its founder, Masayoshi Son would not make a hostile bid for the cable operator.

• And SoftBank’s talks to potentially invest in Uber — which some at the ride-hailing titan feared could have served as a way for its co-founder Travis Kalanick to return to power — have ended, according to Mr. Faber.

Tough Times in Tech

• Kleiner Perkins Caufield & Byers, the veteran venture capital firm, confirmed to Bloomberg News on Monday that it had shut down its $4 million seed-stage investment fund, KPCB Edge. The three partners who ran the fund, Anjney Midha, Roneil Rumburg and Ruby Lee, left the firm in recent weeks.

And Mike Abbott, a prominent Kleiner Perkins partner, wrote in a personal blog post that he is leaving the firm. Mr. Abbott, a former Twitter engineer, said that he wants to “build the next new thing.”

• Speaking of seed funding: Despite a surge of interest from wealthy individuals looking to invest in technology start-ups, such financing appears to be drying up.

The number of seed-stage investments is down 40 percent from its peak two years ago, according to Reuters. About 900 such deals were struck in the second quarter this year, compared to 1,500 during the comparable quarter in 2015.

Some in Silicon Valley worry that investors are becoming concerned about overinflated valuations of start-ups. Others think that existing technology giants like Facebook and Google are so powerful that they can quickly squelch newborn competitors.

• Snap Inc. could have had a worse Monday. Shares in the Snapchat parent closed down just 1 percent that day, the first time that some insiders could sell stock after the company’s springtime initial public offering.

The expiration of the first so-called “lockup period” meant that roughly 400 million shares held by early investors and company executives could be sold.

But analysts said that the event had been priced into the stock. Snap’s shares went down as much as 5 percent before whipsawing throughout the day, and closed at $13.67.

The next moment of potential drama is likely to be at the end of August, after Snap reports its latest quarterly earnings — and the second phase of the lockup expires.

Snap’s stock price is now down nearly 20 percent from its initial offer price.